Over 100 billion apps are downloaded in the app store annually. The wonderful world of application development does not end when the app is created – now it’s time to start making money. The business of app development has become one of the most lucrative areas to be in today. That is, if you do it right.
Publishers can choose different types of monetization strategies for their app. Apps that are priced according to the freemium business model are free to download but have in-app purchases. Paid apps are free of in-app purchases but are priced in the app store. Paidmium apps are paid downloads with in-app purchases. Some apps are dynamic, which means the business model shifts depending on certain factors. For instance, when a user does not make an in-app purchase the app shifts to an ad-supported model.
Mobile apps monetize especially well through freemium and in-app advertising. Freemium apps allow different types of monetization options. Dropbox, a free storage app that provides its users with a limited amount of data volume, offers increased volume to paying users. Another example is Skype, a voice and video communications app that is free of charge – unless users wants to benefit from certain upgrades, add-ons or speed-ups.
Choosing the right pricing strategy is not the only important thing to stress when planning to monetize your app. Below you’ll find more best practices to keep in mind!
1. Be timely
Determining how your app will monetize before you start building your app is crucial. App publishers employ a variety of business models to generate revenue. Popular business models include freemium (Candy Crush Saga), paid (Sleep Cycle), paidmium (Grindr Xtra), in-app advertising, or a hybrid model such as a fermium app that also generates revenue from in-app advertising. You can always change your model!
2. Add value
Once you’ve picked a business model for your app, it is time to formulate how your app will provide value by solving a problem. An example is BuzzFeed, an app that acts as a bridge between news sources – solving your problem from jumping from app to app for reading your desired content.
3. Engage with your users
App publishers need to keep engaging with their users, if they don’t they will lose them. A way to use continuous user engagement is by allowing users to upload user-generated content.
4. Making your app the channel for ads
Mobile advertising revenue worldwide has increased by 1.9 times from 2012 to 2013. A research on mobile app advertising and monetization forecasting trends from 2012 to 2017 shows that 40 percent of the surveyed uses paid advertising within their apps. Be sure to find the right ad network for your app and find the right balance between monetizing through app stores and through in-app advertising. Making sure your app users are not bothered by the in-app advertising is key, more on that further on in this list.
5. Ad content
If your app focuses on dieting you don’t want your in-app advertising to promote fastfood discounts. In contrast, you want it to promote healthy cookbooks or gyms. Also, if your app is freemium and analytics show that your users are not making in-app purchases, you need to take into consideration that your users might not want to spend (a lot of) money. Keep your users in mind when selecting the content of your advertising. Find the format that best fits the user.
6. User experience
Freemium and dynamic apps are ad-supported. In-app purchases might enable ad-removal, but if not they should not degrade user experience. People do not want to be bothered by loads of pop-up ads or having to wait 30 seconds for your advertising clip to end before using the app. Consumers are becoming more aware of the way they are approached or influenced by advertisers. The display of ads has to be done properly or users will get rid of your app in no-time.
7. Track, analyze, research and optimize
You’re not done once you have implemented your monetization strategy. All kinds of (free) online tools to measure usage and analyze these results are available. An example is Google Analytic’s Mobile App Analytics service, it even allows you to find and engage with new and relevant users. Continuously measure and improve your monetization strategy and keep the ever-changing market trends in mind.
The opportunities for apps are rapidly evolving and so is the mobile advertising market. If you wish to successfully develop an app, think about the marketing process after the creation process. Not having the mind of a marketer isn’t a problem, as long as you include one when planning on monetizing!
Sophie is an International Communication and Media student at the University of Applied Science of Utrecht. Her combined interest of the three w’s and marketing every now & then result in a piece of text. These words happen to show up on this blog. Read it or weep!